Why a high speed broadband network is crucial for Australia

As usual, the current Australian government has done a poor job at explaining the benefits of one of their major initiatives and as a consequence it is being largely ignored and risks being totally abandoned if they lose power. I’m talking about the National Broadband Network.

Unfortunately, the cost of the Australian government’s planned $43 billion National Broadband Network has become the issue rather than the benefits of high speed broadband for the country. The Opposition has focused on the cost, perhaps with good reason, and claim that the project is a White Elephant, yet they haven’t offered any viable alternatives.

Meanwhile the Government has failed to sell the real benefits of the NBN to the public and potentially negate the argument against.

I’m no infrastructure expert and I don’t pretend to know the best way to deliver high speed broadband to the nation but I do believe we as a country must have a high speed broadband network as soon as possible.

Australia has been fortunate to become a rich nation due to natural resources. The country initially grew rich off the sheep’s back and more recently has smugly cruised along due to a prolonged resources boom.

But this won’t last forever and we should be doing much more to invest in becoming a smart country that benefits from ideas rather than mineral resources. In fact, I suggest that if the Government proposed to invest the takings from a mining tax and invested it directly into infrastructure such as the NBN then very few could argue with the logic of using our mineral wealth to build our future prosperity.

A comprehensive high speed broadband network will benefit Australia in so many ways. Here are just a few I can identify:

1. Increased cross-border trade in IT services and what is called IT-enabled services (ITES). Some estimates for the IT services and ITES market put it between $US475 billion and $US700-800 billion. However, it was suggested that in 2007 less than 15 per cent of that market was being tapped, indicating a significant potential for growth. Emerging economies such as India, China, Costa Rica and the Philippines are tapping into this market while Australia is left behind. In 1995 India’s software exports jumped from $US1 billion to hit $US32 billion in 2007 and the industry now employs 1.6 million people. (source: World Bank).

2. Energy, transport and emissions reductions. As we become a more digitized economy, conducting more and more business online the nature of business and employment changes dramatically. The US city of Seattle reports a potential saving of up to $US1 billion per year from its investment in a fibre-to-the-node network due to effects in the electricity and transport sectors, along with a reduction in carbon emissions. (source: Seattle.gov) That’s just one city, smaller than our two largest cities.

3. Grow regional centres. The Government has long promoted Regional Centres of Excellence to stop the migration to our crowded capital cities. A high speed broadband network surely is crucial to such a plan. Here in Newcastle we lament the drain of talent down the F3 to Sydney and feel that this city could contribute enormously to the economy with clean-tech and IT industries given the appropriate infrastructure.

4. Economic growth. The Australian Bureau of Statistics report that income derived over the Internet soared by 52 per cent in the 2008-09 financial year to reach $123 billion (up $42 billion) as an additional 25,000 businesses began to received orders over the Internet and the take up of broadband rose. But this is only the tip if the economic iceberg and greater growth is possible because only 27 per cent of all businesses use the Internet to generate business currently.

5. Be internationally competitive. South Korea’s Government has invested $US70 billion into high speed broadband to give the country the world leading coverage. It is now accepted the broadband investments have been key to South Korea’s status as a middle-income nation after years of economic despair. Home-grown online gaming and entertainment have boomed in South Korea as a result.

As outlined in a May 2010 Fibre-to-the-Home Council report on the global ranking of FTTH-connected broadband countries, Korea is on top, the US and China are near the middle and Bulgaria is No.23. Australia doesn’t even make the list.

Finland’s Ministry of Transport and Communications has made 1-megabit broadband Web access a legal right and said it would make a 100Mb broadband connection a legal right by the end of 2015. Here is an example of a once agricultural economy that has steadily transformed itself into a tech economy. Finland has long been a tech-industry leader that has done a fine job investing in technology, more than many of its European counterparts. It’s also home to Nokia, among other tech firms.

Then there’s the benefits for education, medicine, energy and more.

Countries like Finland and South Korea are clearly planning for the future with this strong step into broadband and it’s inevitable that many more countries will follow.

If 100mps is destined to become the norm amongst progressive countries, where will that leave Australia? Irrespective of whether the final result is the proposed National Broadband Network or an alternative scheme, the truth is that Australia needs to address the need for widespread high speed broadband quickly. Its crucial to our future.

Update: An hour after I posted this, the Coalition released their broadband policy and plans. It hasn’t been well received by most commentators and appears to be a patchwork solution at best. Here is political commentator Peter Hartcher’s take on the two plans thus far.

Over to you: I feel its incumbent upon Australia’s digital community to drive the debate on high speed broadband. If you have more examples or information you can share please comment here, and provide links. Hopefully we can compile the best information and use it productively.

Note: tonight I’m attending a forum on the NBN and its benefits for regional centres such as Newcastle. I’ll add to this post if any new information is revealed.

Craig Wilson a leading digital and inbound marketing consultant who was recently ranked globally as one of Top 100 SEO Experts to follow. He is managing director of Sticky, a digital agency based in Newcastle, Australia and co-founder of DiG Festival.

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Digital Marketing Consultant

Craig Wilson a leading digital and inbound marketing consultant who was recently ranked globally as one of Top 100 SEO Experts to follow. He is managing director of Sticky, a digital agency based in Newcastle, Australia and co-founder of DiG Festival.

Media Hunter is a forum for exploring modern media, marketing, start-ups and innovation.

Craig is a contributor to the collaborative series of world-wide marketing books The Age of Conversation 1, 2, 3. He has contributed to Marketing Magazine and Digital Ministry and is often called on by media to comment on industry news. Craig is regularly invited to speak on media issues, especially social and digital media, and at various events around Australia on topics ranging from Search Engine Optimisation, the changing media and marketing landscape and inbound marketing.